The Gym Group eyes 50 new site openings

The Gym Group is looking to open up to 12 new locations this year as part of expansion plans under its new ‘next chapter’ strategy.  

The group plans to open around 50 new sites over the next three year, it told shareholders on Wednesday, with an average return of invested capital of 30 per cent.

The Gym Group cited analysis by PwC suggesting there is scope for 600 to 850 new gym sites throughout the UK, but did not reveal locations for its proposed new gyms.

The average headline price of a standard membership at The Gym Group increased to £23.16 in December 2023, compared with £21.49 in December 2022.

New gyms: The Gym Group is looking to open between ten to 12 new locations this year

Joining prices for new members increased, while more users signed up to the group’s premium membership offerings during the period, demonstrating strong demand.

The Gym Group shares rose 5.29 per cent or 5.8p to 115.40p on Wednesday, having  fallen over 10 per cent in the last year. 

The group reported earnings before interest, taxes, depreciation, and amortisation for the year of £75.5million, up six per cent year-on-year.

It reported a statutory pre-tax loss of £8.4million, representing an improvement from the £19.3million loss reported last year.  Its adjusted annual pre-tax loss was £5.5million.

Revenue for the year reached £204million, up 18 per cent on the £172.9million for 2022.

The group closed the year with 850,000 members, up 4 per cent on 2022, while average members through the year were 8 per cent ahead of the prior year. 

It added: ‘Average revenue per member per month rose 9 per cent in the year to £19.50 as we continued to optimise our headline rate and drive penetration of our premium subscription product.’

Will Orr, the group’s chief executive, said: ‘We have maintained positive momentum in revenue through the second half to deliver results that have offset cost inflation, in line with our guidance. 

‘With a strong start to 2024, and clear signs that demand for health and fitness has never been stronger, these are solid foundations on which to build our Next Chapter growth plan. 

‘Over the next three years, we aim to strengthen the performance of our core business and accelerate The Gym Group site rollout. There continues to be substantial headroom for low cost gyms in the UK and we are fully focused on our aim of making high value, low cost fitness even more accessible for all.’

Russell Pointon, director of consumer at Edison Group, said: ‘CEO Will Orr spoke to the “solid foundations” reflected in the results, which will underpin the newly unveiled Next Chapter growth plan. 

‘This initiative aims to optimise returns from existing assets, expand the footprint with the addition of 10-12 quality sites in 2024 and potential to add many more thereafter, and explore new revenue streams.

‘Looking ahead, 2024 has seen a promising start, reflected in a 12 per cent increase in LFL revenue and a 7 per cent growth in membership, reaching 909,000 by February. 

‘Should The Gym Group execute on its growth plan effectively, it will be able to drive sustainable profitability and cash generation, which will position itself for continued success in the competitive fitness industry landscape.’

This post first appeared on Dailymail.co.uk